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Posts Tagged ‘Federal Reserve’

Fed Speak: A Translation

Eccles Building

The Eccles Building in Washington D.C., home office of the Federal Reserve.

“We have a 2 percent symmetric inflation objective. For a number of years now, inflation has been running under 2 percent, and I consider it an important priority to make sure that inflation doesn’t chronically undershoot our 2 percent objective.” So said outgoing Federal Reserve chair Janet Yellen last week in the course of assessing her on the job performance over the past year.

According to her, everything else is pretty awesome. Unemployment’s down. The economy’s growing at a 3 percent clip. The stock market may be a little pricey but it’s really nothing to get too excited about.

Why, if it weren’t for that persistently low inflation, she’d be batting close to 1.000 and having an all around MVP year here in 2017.

What shall we say to all this? It seems to me that the first order of business is to translate Yellen’s inflation comments into plain English. Academics, politicians and others who wish to hide their meaning from the general public love to use obscure language. But one of the chief jobs of any Christian teacher, whether he’s a blogger or a preacher it makes no difference, is to penetrate the fog to permit a fruitful discussion.

That said, here’s my translation of Janet Yellen’s Fed Speak: “Our objective here at the Fed is to steal 2 percent of the value of the deplorables’ savings each year by creating credit a pace that is faster than the actual rate of growth of the economy. This, combined with our holding interest rates near 5,000 year lows to keep the rubes from earnings any interest in their savings accounts, represents a one-two punch to the middle class. By employing these policy tools, we enlightened folks here at the Fed can strip mine wealth from unsuspecting nobodies, who don’t deserve what they have anyway, and put it into more worthy hands, namely, those master of the universe types who own the banks and pay our salaries. Unfortunately, I was not as successful in this regard as I would like to have been.”

Now that’s more like it. We’re finally getting somewhere. No doubt, Janet Yellen would be greatly offended by my translation, as would pretty much any other central banker, mainstream economist, investor, or financial commentator. Perhaps some of the defenders central bank orthodoxy in academia, the press and in government really do honestly think that debt-based, central bank issued, fiat currencies actually serve the public interest. But that hardly gets them off the hook. They should know better, for the evidence is overwhelming that the current system – which is of, by and for the bankers – is a massive, and profoundly immoral, wealth transfer mechanism.

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Happy April Fool’s Day! And good April Fool that I am, I find myself hard at work once again to bring you my weekly blogging awesomeness.

Well, okay. Maybe awesomeness is a little too strong. I’ll settle for weekly blogging not-too-horribleness.

At any rate, I am kinda pumped about this week’s topic, namely the Federal Reserve. In short, I’m fed up with it.

But more than that, there are few things in life that bring joy to my heart more than the thought of dishing out a good beat down to ne’er do well boys and girls at the dear Federal Reserve.

I find it, how shall I say….cathartic. Yes, that’s it! Cathartic! And since it’s been a little while since I’ve dissed the Fed, I expect that it will prove all the more so.

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March MadnessAh, March madness, AKA man cave season. I had a boss once who always took off starting the Thursday of the first tournament game and spent his whole weekend binge watching college basketball. I’m guessing he probably wasn’t alone.

I’m not quite that hardcore, but I do love me a little college hoops too, especially when my Cincy Bearcats are playing well. Nice win tonight over K-State!

Of course, watching basketball has also manages to interfere with writing, which is why I getting a late start with this week’s TWIR, which is why this won’t get posted until Saturday. But hey, a man’s gotta do what a man’s gotta do.

On a more philosophical note, it seems to me that March Madness isn’t limited to the basketball court, but can be found in any number of places having nothing at all to do with Mr. Naismith’s invention. Take for example…

Monetary Madness

There are few, if any, examples of mass derangement to rival the hoopla surrounding a meeting of the Federal Reserve Open Market Committee (FOMC).

Eight times a year we’re treated to weeks of speculation about the FOMC’s upcoming decision, will they or will they not raise interest rates.

These meetings, as well as the Fed chairman’s semi-annual Humphrey-Hawkins testimony before Congress, are breathlessly reported on by the mainstream media.

To give you a sense of the absurdity of the coverage, back in the day when Alan Greenspan was in charge of the Fed, there were people who believed they could tell what would be done with interest rates based upon which hand “The Maestro” used to carry his briefcase.

We were treated to another such round of absurdity this past week as Janet Yellen, high priestess of the FOMC herself, sauntered forth from the bowels of Eccles Building to announce to the world her latest oracle: The economy’s awesome and we’re hiking interest rates.

All this was reported with the utmost seriousness by the mainstream financial press who dutifully played their roll as Fed echo chamber.

All, that is, except for one.

As Zero Hedge reports, Kathleen Hays of Bloomberg TV was perplexed at just how a supposedly data dependent Fed – the Fed is always talking about how their decisions on interest rates depend on economic data – could hike interest rates at a time when hard economic data is in a downward spiral.

The Bloomberg report’s pointed questions apparently both annoyed and frightened t he high priestess who never really answered the questions put to her.

And so it goes.

An even better question then why the Fed is choosing to raise interest rates into a deteriorating economy is why the Fed should have any say in interest rates at all.

Interest rates are the price of money, and as with the price of all other goods and services, interest rates ought to be set by the free market, not the monetary politburo called the FOMC.

There is no sound Biblical, constitutional, or economic argument for central banks, central bankers, or the fixing of interest rates by them.

But while sound reason based on Scripture leads to the rejection of central banking, the Marxists love it. In fact, the establishment of a central bank was one of the Ten Planks of the Communist Manifesto. There, Marx on Engels advocated for the, “Centralization of credit in the hands of the State, by means of a national bank with State capital and an exclusive monopoly.”

In the US, the central bank is called the Federal Reserve Bank, AKA “The Fed.”

That’s right. The button pushing boys and lever pulling girls in the Eccles building (that the Fed’s headquarters) are the dupes, slaves, and minions of one of history’s most destructive thinkers.

Actually, if you throw in the money printing madness inspired by one John Maynard Keynes, you can make that two of history’s most destructive thinkers.

Stop the monetary madness! End the Fed!

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rinkeby-riots

A policeman inspects a burned out vehicle following the riots in Rinkeby, Stockholm.

Some things seem to naturally go together. Peanut butter and jelly come to mind as a natural pairing. Baseball and summertime? I’m in. Even the terms “blowhard” and “politician” evoke a certain warmth of familiarity within me.

 

But riots and Sweden??!! Surely, you jest! Nevertheless, as they say, truth is stranger than fiction…

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